Research Review: Hindsight bias and investing

Rob Hamshar  |  Portfolio Construction Forum  |  10 May 2022  |  2.00 CE

The core concepts of hindsight and foresight have been described as a “psychological watershed” in our perception of the events unfolding in the world around us. From the present, we look forward (i.e., foresight) and attempt to understand the course of events yet to come. Looking backward (i.e., hindsight), we reflect on events that have already unfolded (as well as how our prior understanding and attempts at foresight have fared). Hindsight, when deployed with self-awareness, caution, and skill, can be a valuable source of learning and means for improving foresight....

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